Grainger plc has experienced significant growth, adding over 1,000 homes to its portfolio this year.
- The Newcastle-based company’s rental income grew by more than 10%, supported by a 6.3% like-for-like rental rise.
- The firm’s asset recycling programme generated £274 million, bolstering its growth initiatives and balance sheet.
- Grainger is set to become a Real Estate Investment Trust (REIT) next year, leveraging tax benefits.
- Despite a slight decline in occupancy, the portfolio remains robust with 97.4% of properties fully let.
Residential property company Grainger plc has marked a year of substantial growth, highlighted by the addition of over 1,100 homes to its diverse portfolio. The firm has also reported a double-digit increase in rental income, underpinned by a 6.3% rise in like-for-like rental figures. Although this growth rate has decelerated compared to the previous year, it continues to outpace historical averages.
Chief Executive Helen Gordon stated, “Grainger has delivered double-digit rental income growth this year in line with expectations, with strong like-for-like rental growth,” while anticipating rental growth to remain above historic averages into FY25. This optimistic outlook is attributed to favourable economic conditions, including high-wage growth across target demographics and geographic markets.
The company effectively leveraged its asset recycling initiative, generating £274 million through the disposal of non-core assets. These funds are set to be reinvested into expansive growth plans while maintaining financial health, as highlighted by Grainger’s leadership.
Moreover, Grainger has made strides in property development, completing housing projects in Cardiff, Bristol, Birmingham, and London, alongside acquiring a new development tract in Manchester. With the government poised to reform the planning system and enhance rental market standards, Grainger is strategically positioned for continued expansion.
In a significant strategic manoeuvre, Grainger aims to transition to a Real Estate Investment Trust by October next year. This status will offer tax advantages, contingent upon deriving 75% of profits from rental activities rather than asset sales. The firm expects this shift to optimise returns as it scales operations.
Occupancy rates, although slightly lower, persist at a robust 97.4%, indicating sustained demand amidst constrained supply in the UK rental market.
Grainger plc is poised for robust future growth, supported by strategic expansions, high occupancy, and upcoming REIT status.
